In 2002, Congress passed a massive revision of the law that regulates
national political campaigns. The Bipartisan Campaign Reform Act (BCRA)
 or, as it is more commonly known, the McCain-Feingold law 
was an attempt to end abuses that allow large corporations, labor unions,
well-funded interest groups, and wealthy individuals to circumvent the
disclosure requirements of campaign finance law, and the legal limits
on the size of campaign contributions, by pouring hundreds of millions
of dollars of "soft money" into federal election campaigns.

Within days of BCRA's passage, eleven lawsuits were brought to challenge
the constitutionality of almost all provisions of the law. The 84 plaintiffs
(later reduced to 77) ranged from the Republican National Committee, the
U.S. Chamber of Commerce, and the National Rifle Association, to the ACLU,
the AFL-CIO, and the California Democratic Party. The case was known as
McConnellv. Federal Election Commission, after Senator
Mitch McConnell, the lead plaintiff.

McConnellv. FEC was assigned to a three-judge court
in the District of Columbia. After a massive amount of information relevant
to the financing of election campaigns was collected and assembled, the
court heard nine hours of oral argument by 23 separate attorneys.1
On May 1, 2003, it issued a voluminous set of opinions upholding most
sections of BCRA, narrowing some, striking down a few, and finding that
others were not yet "ripe" for a legal challenge. The case was
immediately appealed to the Supreme Court, which scheduled a special session
for oral argument on September 8, 2003 - a highly unusual four hours of
argument by eight separate attorneys.

On December 10, 2003, the Supreme Court announced its decision upholding
all the major provisions of BCRA. The majority opinion by Justices John
Paul Stevens and Sandra Day O'Connor described the long history of efforts
to "purge national politics of what was perceived to be the pernicious
influence of 'big money' campaign contributions,"2
and recounted how, in the past 25 years, our system of campaign finance
has been subverted by ever-larger infusions of unregulated and undisclosed
soft money, in the form of contributions to political parties and massive
spending on TV ads. Dissents from Justices Anthony Kennedy, Antonin Scalia,
and Clarence Thomas accused the majority of trashing the First Amendment
and acquiescing in a self-serving law passed by incumbent officeholders in order
to hobble the campaign efforts of their challengers.3

It was not long before new "as applied" challenges were brought
to BCRA. In April 2007, a challenge by Wisconsin Right to Life was argued
before the Supreme Court. By this time, Justice O'Connor, the "swing
vote" in McConnell, had been replaced by a new justice, Samuel
Alito. It seemed likely that a majority of the Supreme Court would now,
at the very least, create a loophole in BCRA for "issue ads"
of the type run by Wisconsin Right to Life, and this is exactly what happened.

Then in January 2010, a slim majority of the Supreme Court upended campaign finance regulation entirely by striking down longstanding bans on direct corporate expenditures for election campaigns. The decision in Citizens United v. Federal Election Commission allows unlimited corporate power to dominate elections. The five-justice majority viewed corporations as having full First Amendment rights and saw no compelling justification for limiting their expenditure of shareholders' money for electioneering; the four-justice dissent had a very different view of the scope and purpose of the First Amendment.

This Campaign Finance Page outlines the free expression policy issues
in this huge, complex, and vitally important debate. The sections that
follow provide background on the problems that led to BCRA's passage,
explain the Supreme Court's decision in McConnell, describe the
challenges posed by Wisconsin Right to Life and Citizens United, and analyze the stakes
for free speech and democracy.

In 1971, Congress passed sweeping legislation that limited both contributions
to and expenditures on federal election campaigns. Known as FECA (the
Federal Election Campaign Act), the law also barred corporations and labor
unions from spending money on federal elections unless they create separate
"segregated funds," or PACs. And it imposed disclosure requirements
so that, theoretically at least, the public would know who is paying for
federal election campaigns.

FECA was challenged in the case of Buckley v. Valeo, decided by
the Supreme Court in 1976. In a near-200-page opinion, the Court upheld
FECA's cap on campaign contributions; struck down the cap on independent
expenditures because, the majority said, such a cap unduly burdened the
First Amendment right to political speech; and upheld the disclosure requirements.
The Court interpreted the disclosure rules narrowly, however, to apply
only to "communications that expressly advocate the election or defeat
of a clearly identified candidate" by using such explicit words as
"vote for," "elect," or "reject."4

Politicians, political parties, corporations, unions, interest groups
of all sorts, and wealthy individuals soon found ways around the contribution
limits and disclosure requirements of FECA. The primary vehicle was soft
money5  funds not subject to FECA because they
were, ostensibly, used for state and local rather than federal elections,
for general party-building, or for campaign advertisements that avoided
the "magic words" of express advocacy identified in the Buckley
decision.

Such "sham issue" advertisements, as they are called, generally
ran on radio or TV in the month or two before a federal election. They
typically addressed a political issue, described a particular candidate's
position on the issue, and urged viewers either to "thank" the
individual or tell him to change his position. The message to vote for
or against the candidate was clear despite the absence of "magic
words." As the Supreme Court eventually found, these ads "enabled unions,
corporations, and wealthy contributors to circumvent" FECA, and,
although "ostensibly independent of the candidates, the ads were
often actually coordinated with, and controlled by, the campaigns."6

The evidence submitted to the court in McConnell v. FEC contained
many examples of such sham-issue campaign ads. One, created by the Republican
National Committee, featured the voices of then-presidential candidate
Bob Dole, his wife Elizabeth, and a narrator, talking about "the
value of hard work," the superiority of "work to replace welfare,"
and the importance of "discipline to end wasteful Washington spending."
The ad ended with Dole intoning: "It all comes down to values. What
you believe in. What you sacrifice for. And what you stand for."7
This ad was plainly designed to aid Dole's campaign; yet it was funded
wholly outside the campaign finance system, with soft money contributions
that were neither disclosed nor subject to the contribution limits of
FECA.

Similarly, an ad funded by the League of Conservation Voters in 1996
had the following text:

It's our land; our water. America's environment must be protected.
But in just 18 months, Congressman Ganske has voted 12 out of 12 times
to weaken environmental protections. Congressman Ganske even voted to
let corporations continue releasing cancer-causing pollutants into our
air. Congressman Ganske voted for the big corporations who lobbied these
bills and gave him thousands of dollars in contributions. Call Congressman
Ganske. Tell him to protect America's environment. For our families.
For our future.8

Although the message was admirable - promoting environmental protection
- this ad was clearly a campaign pitch to defeat Congressman Ganske. As
Judge Richard Leon noted in his separate opinion at the three-judge court
stage of the McConnell case, "if one word were changed, if
instead of 'call Congressman Ganske,' the ad said, 'Defeat Congressman
Ganske,' it would clearly qualify as a candidate ad subject to contribution
limits and disclosure requirements."9

Sham issue ads such as these are virtually indistinguishable from official
campaign messages funded by "hard money." As the three-judge
court in McConnell found, even official ads rarely use the "magic words"
these days. One political consultant explained:

In the modern world of 30-second political advertisements, it is rarely
advisable to use such clumsy words as "vote for" or "vote
against." ... All advertising professionals understand that the
most effective advertising leads the viewer to his or her own conclusion
without forcing it down their throat. ... The notion that ads intended
to influence an election can easily be separated from those that are
not based upon the mere presence or absence of particular words or phrases
such as "vote for" is at best a historical anachronism.10

How Soft Money Works

The soft money system that funded sham-issue ads and other aid to federal
candidates worked in several ways. The primary method was through large
contributions to the national Republican and Democratic parties, ostensibly
for activities other than federal election campaigns. In addition to sham
issue ads, the two major parties then used soft money for get-out-the-vote
drives, overhead, and other expenses that benefitted federal candidates
without dipping into their campaign funds or being subject to FECA limitations.

The national parties also passed along soft money to their state and
local affiliates, which spent it on activities that benefitted federal
candidates. As the Supreme Court majority explained in McConnell, under previous campaign
law formulas, state parties could attribute a lower percentage of their
general, "mixed purpose" expenditures to federal elections than
national parties could. As a result, in the year 2000, for example, "the
national parties diverted $280 million - more than half their soft money
- to state parties."11

Contributions made directly to state and local parties were also used,
albeit indirectly, to boost federal campaigns. Finally, the parties gave
soft money to nonprofit organizations and political committees to spend
on sham issue ads and other activities that helped federal candidates.
In 1996, for example, the Republican National State Elections Committee
gave $500,000 to the National Right to Life Committee for "issue
advocacy" activities; Americans for Tax Reform received almost $4
million.12

All manner of interest groups, meanwhile, funded their own sham-issue
ads. The leading spenders were the National Rifle Association, "Citizens
for Better Medicare," which was funded by the pharmaceutical industry,
"Republicans for Clean Air," which actually consisted of just
two individuals, and "The Club for Growth," a conservative group
that boasted in a memo of spending "$1 million in television advertising
in key congressional districts to advance our pro-growth issues."
This memo frankly noted that unions had used the same tactics "against
pro-growth candidates," and that "these issue advocacy campaigns
can make all the difference in tight races."13

Finally, corporations and labor unions spent money directly on sham issue
ads. In doing so, they circumvented FECA's ban on corporate or union campaign
spending for federal elections unless they set up separate funds, or PACs.

The explosion in soft-money spending after the Buckley decision
was dramatic. In 1980, the Republican Party spent about $15 million in
soft money and the Democrats spent about $4 million  amounting to
9% of total spending by the two national parties. By 2000, combined major
party soft-money spending was $498 million, or 42% of the total. And since
were no limits on the size of soft-money contributions, the bidding war
for access to and favors from elected officials drove contributions ever
higher. The top 50 soft money donors each gave between $955,695 and $5,949,000.
In 1996, the biggest soft-money donors were Philip Morris, Seagram &
Sons, Nabisco, Walt Disney Company, and Atlantic Richfield.14

Wealthy individuals and corporations often gave gifts to both
parties - a clear sign that the contributors were buying access rather
than financing candidates whose views they supported. Among the many soft
money donors who gave generously to both parties were Global Crossing,
Enron, and WorldCom.15

Many large soft-money contributions to political parties were directly
solicited by senators and congressmen. They often reminded the corporate
officers they solicited that the congressional committees they served
on dealt with issues affecting the particular corporation. Senator John
McCain, a sponsor of the BCRA, testified that members of Congress interacted
with big donors at frequent "fundraising dinners, weekend retreats,
cocktail parties, and briefing sessions." When a solicitation was
successful and the donor wanted a private meeting a month later, "it's
very difficult to say no, and few of us do say no."16
Senator Zell Miller

once publicly described how he "locked himself in a room with
an aide, a telephone, and a list of potential contributors. The aide
would get the "mark" on the phone, then hand me a card with
the spouse's name, the contributor's main interest, and a reminder to
"appear chatty." I'd remind the agri-businessman that I was
on the Agriculture Committee; I'd remind the banker I was on the Banking
Committee. And then I'd make a plaintive plea for soft money. ... I
always left that room feeling like a cheap prostitute who'd had a bad
day.17

The pressure on corporations, trade associations, and wealthy individuals
to make ever-larger donations was documented in a survey by the nonpartisan
Committee for Economic Development. Nearly three-quarters of senior executives
at the nation's largest companies said they felt pressured to make large
political donations. The main reason was "fear of retribution and
to buy access to lawmakers. Seventy-five percent said political donations
gave them an advantage in shaping legislation; and nearly four-in-five
executives called the system 'an arms race for cash that continues to
get more and more out of control.'"18

The evidence in McConnell v. FEC also included instances of essentially
direct offers to trade money for political influence. A letter from the
Republican National Committee to a drug company asking for its opinion
and suggestions on health care reform along with a $250,000 donation provided
one example. An invitation to a fundraising dinner, sent to the Association
of Trial Lawyers of America, provided another. The letter read, in part:
"Our event will give you an excellent opportunity to meet with the
Members of the [Judiciary Committee] to discuss issues relevant to your
organization."19

Thus, although there was no evidence in the McConnell case of
outright bribery, or direct trading of money for votes on a specific piece
of legislation, the evidence did show not only a widespread public perception
of corruption, but an actual, severe distortion of the democratic process.
As Senator Warren Rudman explained, looking for direct tradeoffs "misses
the point," because the access and influence that large donors buy
"is inherently, endemically, and hopelessly corrupting. You can't
swim in the ocean without getting wet; you can't be part of this system
without getting dirty."20

By the end of 2000, according to one expert, "it was clear that
although 'scholars might differ about how best to change the campaign
finance system, ... they could not avoid the conclusion that party soft
money and electioneering in the guise of issue advocacy had rendered the
FECA regime largely ineffectual.'"21 Or,
as the Supreme Court majority put it (quoting a 1998 Senate report), the
senators agreed

that the "soft money loophole" had led to a "meltdown"
of the campaign finance system that had been intended "to keep
corporate, union and large individual contributions from influencing
the electorial process." One Senator stated that "the hearings
provided overwhelming evidence that the twin loopholes of soft money
and bogus issue advertising have virtually destroyed our campaign finance
laws, leaving us with little more than a pile of legal rubble."22

Identifying the problem was one major task; figuring out how to solve
it was immeasurbly harder. Almost any regulation in the area of campaign
finance strikes directly at political speech - which is essential to democracy
and therefore entitled to rigorous First Amendment protection. The BCRA
tackled the problems through two main sections, called Titles I and II,
and three minor ones, Titles III, IV, and V.

Title I addressed the problem of soft money directly. It amended
FECA by adding six new sections, five of which were challenged in the
McConnell case.

r Section
323(b) barred state and local political parties from using soft money
for "federal election activities." It defined "federal
election activities" to include not only communications that support
or oppose clearly identified candidates for national office, but voter
registration and get-out-the-vote campaigns conducted in connection
with a national election, and services by a party employee if he spends
more than 25% of his time on "activities in connection with a federal
election."

r Section
323(d) barred national, state, and local political parties from giving
money to certain nonprofit organizations and political groups so that
they can spend it on federal election campaigns.

r Section
323(e), with certain exceptions, barred federal officeholders and
candidates from soliciting or spending soft money. (One important exception
allowed them to attend and speak at fundraising events.)

r Section
323(f) barred state officeholders and candidates from using soft money
for federal campaigns.

Title II of BCRA tackled the problem of sham-issue ads by corporations
and labor unions. FECA banned corporate or union spending on federal campaigns
but, as interpreted by the Supreme Court in the Buckley case, only
if the communication used specific "magic words" words like
"elect," "vote for," or "defeat." BCRA rejected
the magic words approach and substituted a broader definition of "electioneering
communications" for federal office.

Seven sections of Title II were challenged in McConnell:

rSection
201 defined an "electioneering communication" as "any
broadcast, cable, or satellite communication" that "refers
to a clearly identified candidate for federal office," is made
within 60 days of a general election or 30 days of a primary or convention,
and "is targeted to the relevant electorate." It imposed disclosure
requirements on all such communications.

It also had a narrower, "backup definition" of "electioneering
communication" (in case the first one were to be held unconstitutional).
The backup definition was: "any broadcast, cable, or satellite communication"
that "promotes or supports," or "attacks or opposes,"
a federal candidate, and is "suggestive of no plausible meaning
other than an exhortation to vote for or against" the candidate.

rSection
202 said that when an electioneering communication is coordinated
with a federal candidate or with a political party, then the money spent
on it amounts to a contribution  and hence is subject to the caps
and other regulations of FECA.

rSection
203 banned corporations and labor unions from funding electioneering
communications except through separate segregated funds or PACs. It
had an exception for nonprofit advocacy groups and political organizations.
This exception was based on a 1986 Supreme Court decision, Federal
Election Commission v. Massachusetts Citizens for Life, which ruled
that applying the ban on corporate electioneering to nonprofit, noncommercial
corporations that are devoted to political advocacy violates the First
Amendment.23

rSection
204 eliminated the exception created in section 203 for nonprofit
advocacy groups and political organizations. It was put into a separate
section so that, if ruled unconstitutional, it could be easily "severed"
from the rest of the law.

rSection
213 limited national political parties' discretion in spending on
behalf of federal candidates by requiring them to choose, in some circumstances,
between independent expenditures and "coordinated expenditures."

rSection
214 defined "coordinated expenditures" in a way that doesn't
require formal collaboration between candidates and those funding campaign
ads.

Finally, Titles III and V of BCRA had eight assorted sections
that were also challenged in McConnell:

rSections
304, 316, and 319, the so-called the "millionaire provisions,"
relaxed some of the campaign finance rules for opponents of candidates
who are financing their campaigns through their own fortunes.

rSection
305 dictated that if candidates want to pay the "lowest unit
charge" for broadcast campaign ads, then they cannot "make
any direct reference to another candiate for the same office."

rSection
307 increased the FECA contribution limits from $1,000 to $2,000
for donations to any one candidate, and from $20,000 to $25,000 for
donations to political parties. Total aggregate limits were $37,500 for
contributions to candidates and $57,500 for other contributions.

rSection
318 barred minors from donating to federal candidates, or to a committee
of a political party, because some parents have been known to circumvent
contribution limits by giving money to federal campaigns on behalf of
their minor children.

rSection
504 required broadcasters to collect and disclose information about
a broad range of political advertisements, from requests by specific
candidates for air time, to requests made by anyone to broadcast messages
"relating to any "political matter of national importance."

BCRA
IN THE SUPREME COURT - McCONNELL V. FEC

The Majority Upholds BCRA

The Supreme Court's 298-page decision in McConnellv. FEC
came in many pieces. Justices Stevens and O'Connor's jointly authored
majority opinion upheld the major parts of BCRA - Title I, banning soft
money, and Title II, governing "sham issue" advertising. Chief
Justice Rehnquist contributed an opinion striking down section 318, which
barred minors from contributing to political campaigns (he noted that "minors
enjoy the protection of the First Amendment"), and holding that various
other parts of the law are not yet ripe for a legal challenge.24
Justice Breyer weighed in with an opinion upholding section 504 of BRCA,
which required broadcasters to keep records of requests for political
advertising time.

The majority opinion described Title I of BCRA as "Congress'
effort to plug the soft-money loophole." The "cornerstone"
of the law, section 323(a), banned soft money contributions to the national
parties; the remaining parts of Title I, the Court said, were designed
to reinforce 323(a) and prevent circumvention of its soft money ban through
diversion of funds to state and local parties or advocacy organizations.
Since these are contribution limits, according to the Court, they do not
burden political speech in the same way as limits on expenditures do.
Caps on the amount of contributions "'entail only a marginal restriction
upon the contributor's ability to engage in free communication.'"25

Under this relaxed standard of judicial review - as opposed to the "strict
scrutiny" that the First Amendment requires when government directly
restricts speech - the Court found Title I was justified by the interests
in preventing "'both the actual corruption threatened by large financial
contributors and the eroding of public confidence in the electoral process
through the appearance of corruption.'" These interests, the Court
said, "directly implicate 'the integrity of our electoral process.'"26

Title II of BCRA, in contrast to Title I, directly regulated political
expression, and therefore was subject to "strict scrutiny."
Particularly troubling, from a First Amendment standpoint, was Title II's
broad definition of "electioneering communications" that are
subject to FECA requirements.

But the Court said there is no constitutional rule that only "express
advocacy" of a candidate's election or defeat (using the "magic
words") can be regulated, while "so-called issue advocacy"
cannot. Indeed, Justices Stevens and O'Connor's majority opinion observed,
"the unmistakable lesson" from the evidence in the case is that
the "magic words" requirement is "functionally meaningless"
- most campaign communications do not use them, and virtually all campaign
ads now masquerade as issue advocacy. Admittedly, both express advocacy
of a candidate's election or defeat and the less direct advocacy contained
in issue ads are core political speech. But BCRA did not ban these ads
(except for corporations and unions that chose not to set up political
committees); it only regulated how they are funded, and required disclosure
of their sponsors.27

Requiring disclosure while expanding the definition of "electioneering
communications" served a compelling public interest, said the Court,
because it gives voters essential information. Stevens and O'Connor quoted
the decision of the three judges in the district court:

The factual record demonstrates that the abuse of the present law not
only permits corporations and labor unions to fund broadcast advertisements
designed to influence federal elections, but permits them to do so while
concealing their identities from the public. ... Curiously, Plaintiffs
want to preserve the ability to run these advertisement while hiding
behind dubious and misleading names like: "The Coalition-Americans
Working for Real Change" (funded by business organizations opposed
to organized labor), "Citizens for Better Medicare" (funded
by the pharmaceutical industry), [and] "Republicans for Clean Air"
(funded by brothers Charles and Sam Wyly). ... Given these tactics,
Plaintiffs never satisfactorily answer the question of how "uninhibited,
robust, and wide-open" speech can occur when organizations hide
themselves from the scrutiny of the voting public.28

Another problematic feature of Title II was its application to nonprofit
political advocacy organizations. Some of these groups contribute immeasurably
to democratic debate, and, for a variety of reasons, cannot or will not
create separate PACs in order to criticize public officials or publicize
their voting records on key issues. Section 204 of BCRA specifically covers
them, despite the Supreme Court's contrary ruling in the 1986 Massachusetts
Citizens for Life case.29 Justices Stevens and
O'Connor in their majority opinion finessed this problem by reasoning
that Congress was surely aware that BCRA "could not validly apply
to MCFL-type entities," and that "as so construed,"
section 204 "is plainly valid."30

The only part of Title II that the Court struck down was section 213,
which required political parties to choose between independent or coordinated
expenditures on behalf of candidates. The section's application was narrow,
since its definition of independent expenditures harked back to the magic
words of pre-BCRA campaign regulation. Nevetheless, the Court did not
think that the section made much sense, and it certainly did not survive
"strict scrutiny."31

The Dissenters' Arguments

The dissents in McConnell v. FEC were blistering. They contained
two main arguments - one pragmatic; the other more abstract. The pragmatic
complaint was that, as Justice Kennedy put it, Title I "looks very
much an an incumbency protection plan."32 Generally
speaking, bans on big-money contributions favor incumbents because they
already have name recognition. And specific provisions like section 323(e),
which barred candidates from soliciting soft money, had exemptions - such
as appearances at fundraising events - that are more useful to incumbents
than to challengers.

Justice Scalia put it this way: BCRA "prohibits the criticism of
Members of Congress by those entities most capable of giving such criticism
loud voice: national political parties and corporations." "Is
it accidental," he asked, "that incumbents raise about three
times as much 'hard money' ... as do their challengers?"

... Or that lobbyists (who seek the favor of incumbents) give 92 percent
of their money in "hard" contributions? ... Is it an oversight,
do you suppose, that the so-called "millionaire provisions"
raise the contribution limit for a candidate running against an individual
who devotes to the campaign (as challengers often do) great personal
wealth, but do not raise the limit for a candidate running against an
individual who devotes to the campaign (as incumbents often do) a massive
election "war chest"?33

The majority in McConnell responded to these critiques by arguing that "any concern
that Congress might opportunistically pass campaign-finance regulation
for self-serving ends is taken into account by the applicable level of
scrutiny. Congress must show concrete evidence that a particular type
of financial transaction is corrupting or gives rise to the appearance
of corruption and that the chosen means of regulation are closely drawn
to address that real or apparent corruption."34
But given the majority's deference to the overall BCRA plan, the rejoinder
was not very persuasive.

The dissenters' more abstract concern was the unprecedented extent to
which BCRA regulated core political speech. Justice Thomas wrote: "the
Court today upholds what can only be described as the most significant
abridgment of the freedoms of speech and assocation since the Civil War."
Justice Scalia was more blunt: "This is a sad day for the freedom
of speech."35

Scalia and Thomas were right about BCRA's unprecedented scope, though
they overdramatized its likely oppressiveness. More important, they overlooked
the facts of the case. The evidence convincingly showed how large sums
of money had bought not only access but legislative decisions that favored
wealthy individuals and large corporations at the expense of the public
interest. The majority noted, for example, that "the evidence connects
soft money to manipulations of the legislative calendar, leading to Congress'
failure to enact, among other things, generic drug legislation, tort reform,
and tobacco legislation." It described national party committees'
shameless sale of opportunities to influence legislation, at price levels
ranging from $10,000 to $100,000.36

At bottom, the dissenters and the majority had very different visions
of how democracy should work. Justice Kennedy, who wrote the most extensive
dissent, argued that the only justification for campaign finance regulation
is to prevent quid pro quo agreements in which candidates explicitly
promise to vote a certain way on legislation in exchange for money. Favoritism
and influence are not the same as corruption, he argued, and are in any
event unavoidable in a representative democracy.

It is in the nature of an elected representative to favor certain policies,
and, by necessary corollary, to favor the voters and contributors who
support those policies. It is well understood that a substantial and
legitimate reason, if not the only reason, to cast a vote for, or to
make a contribution to, one candidate over another is that the candidate
will respond by producing those political outcomes the supporter favors.

And "the mere fact that an ad may, in one fashion or another, influence
an election is an insufficient reason for outlawing it. I should have
thought influencing elections to be the whole point of political speech."37

Justice Kennedy also argued against barring corporations and unions from
campaign advocacy, though this issue had long been settled, and was not
new with the McConnell case.38 Seven years later, in the Citizens United case, Kennedy had his revenge and wrote the Court's opinion striking down prohbitions on corporate campaign spending.

On April 25, 2007, 2½ years after the McConnell decision, a new,
"as applied" challenge to BCRA was argued in the Supreme Court.
Wisconsin Right to Life ("WRTL"), an organization that received
major contributions from corporations, had broadcast "issue ads"
just before the 2004 election, attacking Senators Russ Feingold and Herb
Kohl for delaying votes on President Bush's judicial nominees. Feingold
was up for re-election that year; Kohl was not. Wisconsin Right to Life
did not qualify for the exception to campaign finance law established
in the Massachusetts Citizens for Life case because it accepted
contributions from business corporations. (See note 30,
describing the paramaters of the MCFL exemption.)

WRTL argued that its ads were pure issue advocacy and could not constitutionally
be regulated by BCRA. Encouraged by the change in Supreme Court membership
(Justice O'Connor had now been replaced by Justice Samuel Alito), WRTL
also argued that BCRA should be struck down "on its face" because
as-applied challenges are too burdensome - in essence, that parts of the McConnell
decision should be overruled.

The oral argument on April 25 was not encouraging for defenders of the
portion of BCRA's that regulates sham issue ads. The sympathies of both
Justice Alito and Chief Justice John Roberts, the other new addition to
the Court (replacing Chief Justice Rehnquist) clearly seemed to be with
BCRA's detractors. Alito asked Seth Waxman, who was defending the law
on behalf of legislators, including BCRA co-author John McCain, whether
a group running an issue ad that mentioned a candidate more than 60 days
before a general election would have to stop running the ad after the
60-day deadline, even if "an important vote is coming up in Congress
on that very issue." Waxman said it would depend on the context,
but "Justice Alito did not appear satisfied."39

Those on the Court who wanted to overrule major parts of McConnell or at
the least create a loophole for issue ads were likely encouraged
by the wide range of amicus curiae briefs filed in the WRTL case
attacking the law. They ranged from the ACLU to the Chamber of Commerce,
the Republican National Committee, the National Association of Realtors,
and the "Center for Competitive Politics." Those arguing against
an exemption for WRTL or any other weakening of BCRA included the League
of Women Voters and four former ACLU leaders, supported by the Brennan
Center for Justice.40

On June 25, 2007, the Supreme Court ruled, 5-4, that section 203 of BCRA
is unconstitutional as applied to WRTL's ad. Chief Justice Roberts, writing
for himself and Justice Alito, said that Congress may not, consistent with
the First Amendment, ban corporate-funded political ads if they can be
"reasonably interpreted" as not expressly advocating the election
or defeat of a candidate. Justices Scalia, Kennedy, and Thomas went farther
in a concurring opinion; they wanted to strike down section 203 in all of its applications.41

The decision in Wisconsin Right to Life clearly reflected the
change in Supreme Court personnel: Justice Alito had replaced Justice
O'Connor. Justices Souter, Stevens, Ginsburg, and Breyer, in dissent,
argued that all the factors supporting BCRA's expanded definition of "electioneering
communications," and found so compelling in McConnell, were
still present, and that the WRTL ad was clearly targeted at defeating
Senator Feingold.

A year later, again reflecting its new anti-BCRA majority, the Supreme Court struck down another part of the law. In Davis v. Federal Election Commission, the
Court, by a 5-4 vote, invalidated the “Millionaire’s Amendment,” which allowed
federal candidates to solicit contributions at three times the normal limit ($6,900 rather than $2,300) if their opponent has contributed more than $350,000 to his or her own
campaign.
Writing for the majority, Justice Alito rejected the argument that the Amendment was necessary to "level the playing field" in federal elections, and ruled instead that it placed an
unconstitutional burden on wealthy candidates' right to spend as much of their own money as they wished.
The dissent argued that the Amendment didn't burden free speech because rich
candidates could still spend unlimited amounts of their own money.42

The Court was now poised to further unravel campaign finance law, and a feature-length film entitled "Hillary: The Movie," which attacked the then-New York senator and presidential candidate, provided the opportunity. A federal district court ruled that the film, intended for television broadcast and financed by the nontprofit corporation Citizens United, with substantial support from for-profit corporations, was covered by section 203. The group's appeal focused narrowly on whether the law was even meant to apply to a full-length movie of this type, but in 2009, the Supreme Court ordered rebriefing and reargument on the much broader question of whether existing precedents - including Austin v. Michigan Chamber of Commerce (see note 38) and parts of the McConnell decision - should be overruled on the ground that any ban on corporate campaign spending violates the First Amendment.

It was no surprise when, on January 21, 2010, the Supreme Court released its sweeping decision in Citizens United v. Federal Election Commission, holding that the century-old ban on direct campaign expenditures by corporations (and by inference, on labor unions as well) violates the First Amendment. Overruling Austin as well as parts of McConnell, Justice Anthony Kennedy wrote for the five-justice majority that government cannot pick and choose among which kinds of individuals or entities will be allowed to engage in core political speech; it can "regulate corporate political speech through disclaimer and disclosure requirements," but it cannot "suppress that speech altogether."43 He added that the PAC alternative is too expensive and burdensome to be an adequate substitute for the full exercise of corporations' First Amendment rights.44

Justice Stevens, joined by Justices Ginsburg, Breyer and Sotomayor, wrote the dissent in Citizens United. The majority's basic premise, Stevens said, is "that the First Amendment bars regulatory distinctions based
on a speaker’s identity, including its 'identity' as a corporation.
While that glittering generality has rhetorical appeal, it is not a correct statement of the law."45 Stevens proceeded to explain why the artificial, state-created entities known as corporations have never been thought to have the same rights as individual citizens. He also took the majority to task for its aggressive judicial activism: brushing aside a number of narrower grounds for deciding the case and reaching out to establish radical new restrictions on the ability of legislatures to pass laws aimed at controlling the enormous power of money in American elections.

Any restrictions on campaign activity - disclosure requirements, caps
on expenditures, bans on corporate electioneering - burden the
First Amendment right to political speech. But there are countervailing First Amendment interests on the side of allowing all viewpoints - not just the richest or most powerful - to be heard. And the First Amendment is
not an "absolute": when there is a "compelling state
interest," even core political expression can be regulated. It is
difficult to think of a more compelling interest than the preservation
of representative democracy.

The question in cases involving campaign finance often
boils down to whether a restriction is overbroad - that is, whether it
burdens more political speech than necessary - or whether it is "narrowly
tailored" to remedy the evil at hand. In McConnell, a majority
of the Supreme Court deferred to Congress's judgment about what was necessary
to repair the damage. The dissenters passionately disagreed, but they
offered no alternative prescription for addressing the unbridled influence
of money in politics. A new Supreme Court majority in Citizens United thought that "more speech," no matter how great the imbalance in the wealth needed to disseminate that speech, is not only required by the First Amendment, but is the best way to foster democracy. Again, the dissenters (who had been in the majority in McConnell) passionately disagreed.

These sharply divided majority opinions and dissents not only dramatize the difference that one justice can make in deciding the course of constitutional law; they highlight the distinction
between theoretical incursions on First Amendment freedoms and the real
world of federal election campaigns. Although some of BCRA's provisions
are alarmingly broad, the practical realities of money-based politics,
as amply illustrated in the record before the Court in McConnell, suggested that BCRA
- or what is now left of it - might not have the widely censorious effects that its critics feared.

The dissenters in McConnell noted that
BCRA exempted the now highly concentrated mass media from restrictions
on corporate advocacy for the election or defeat of federal candidates. Such an exemption for the news media seemed an obvious requirement of the First Amendment. Justice Kennedy's majority opinion in the Citizens United case pointed to the same anomaly: why should big media companies be allowed unrestricted spending for the election or defeat of political candidates, while other corporations are not? Citizens United eliminates the anomaly, but at what many observers think will be a significant cost to the fairness of elections and the functioning of democracy.

Interestingly, the ACLU itself has been torn by dissension over the free-expression
interests on both sides of the campaign finance debate. Five former executive
directors and legal directors of the organization filed a friend of the
court brief in McConnell taking issue with the organization's continuing
opposition to campaign finance regulation. With regard to disclosure requirements
for electioneering ads, for example, this brief argued that they "enhance,
rather than retard, First Amendment interests," because the marketplace
of ideas is "ill-served by a regime of shadowy, untraceable expenditures,"
and "suffers when corporations and labor unions are able to monopolize
electoral communications" through their large treasuries.46

It is too early to measure the fallout from the radical change in campaign finance law engineered by the Supreme Court's remarkably activist decision in Citizens United. The decision did have the virtue at least of eliminating the necessity for case-by-case decisionmaking on which of the thousands of nonprofit advocacy corporations (such as the ACLU) are entitled to the Massachusetts Citizens for Life exemption from the ban on corporate advocacy (see note 30). Now, the ban itself has been eliminated by judicial fiat.

The majority opinion in McConnell closed by noting: "We are
under no illusion that BCRA will be the last congressional statement on
the matter. Money, like water, will always find an outlet."47 Ultimately, it will take a fundamental rethinking of the meaning and purpose of the First Amendment - including a reconsideration of the Court's original ruling in Buckley v. Valeo that money equals speech - before the overwhelming power of heavily financed televised campaign ads will cease to frame and often determine the outcome of elections.

3.McConnell v. FEC, 540 U.S. at 286 (opinion
of Justice Kennedy, concurring in part and dissenting in part), 264 (opinion
of Justice Thomas, concurring in part and dissenting in part), 247 (opinion
of Justice Scalia, concurring in part and dissenting in part). Chief Justice
Rehnquist also dissented in part, 540 U.S. at 350.

5. In the various court opinions, the judges refer
to soft money as "nonfederal funds," to distinguish this income
source from the "federal funds" or contributions that were regulated
under the pre-BCRA campaign finance law.

24.McConnell v. FEC, 540 U.S. at 231-32 (citing
Tinker v. Des Moines Independent Community School District, 393
U.S. 503 (1969)). The parts of the law held not ripe for review were sections
304, 307, 316, and 319.

25.McConnell v. FEC, 540 U.S. at 134-35 (quoting
Buckley v. Valeo, 424 U.S. at 20). In Buckley, the Court
explained: "a contribution serves as a general expression of support
for the candidate and his views, but does not communicate the underlying
basis for the support. The quantity of communication by the contributor
does not increase perceptibly with the size of his contribution ... The
overall effect of the Act's contribution ceilings is merely to require
candidates and political committees to raise funds from a greater number
of persons and to compel people who would otherwise contribute amounts
greater than the statutory limits to expend such funds on direct political
expression." 424 U.S. at 21-22.

26.McConnell v. FEC, 540 U.S. at 136 (quoting
Federal Election Comm'n v. National Right to Work Comm., 459 U.S.
197, 208 (1982)).

28.Id. at 196 (quoting the three-judge court,
251 F. Supp.2d at 237). The Supreme Court noted that minor parties or
organizations sponsoring political ads could gain an exemption from the
disclosure requirements if they coud show "'a reasonable probability
that the compelled disclosure of a party's contributor's names will subject
them to threats, harassment, or reprisals from either Government officials
or private parties.'" Id., 198 (quoting Buckley v. Valeo,
424 U.S. at 74).

30.McConnell v. FEC, 540 U.S. at 211. To qualify
for the Massachusetts Citizens for Life exemption, the nonprofit
organization must be "formed for the express purpose of promoting
political ideas, and cannot engage in business activities"; it must
have "no shareholders or other persons affiliated so as to have a
claim on its assets or earnings"; and it cannot be "established
by a business corporation or a labor union," or "accept contributions
from such entities." Id., 210-11 (quoting Federal Election
Comm'n v. Massachusetts Citizens for Life, 479 U.S. at 264).

The Free Expression Policy Project began in 2000 as a project of the National Coalition Against Censorship, to provide empirical research and policy development on tough censorship issues and seek free speech-friendly solutions to the concerns that drive censorship campaigns. In 2004-2007, it was part of the Brennan Center for Justice at NYU School of Law. Past funders have included the Robert Sterling Clark Foundation, the Nathan Cummings Foundation, the Rockefeller Foundation, the Educational Foundation of America, the Open Society Institute, and the Andy Warhol Foundation for the Visual Arts.

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